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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Market Notes: Turning Japanese -- May 13 9 comments
    May 13, 2013 5:35 PM | about stocks: NMR, MTU, SMFG, TM, SNE

    4:00pm ET: The sun continues to shine both on both the US and Japanese markets as both countries' powerful central banks are committed maintaining a low interest rate environment as a mechanism for spurring economic growth. These actions are luring investors away from low-yielding bonds into equities which is what has been fueling this rally. Ever since Japan's Prime Minister Abe's promise to stimulate his country's moribund economy, we've been highlighting Japanese companies that trade here on US exchanges. (Scroll down to find more.) Today, we're adding other issues to that group as well as reiterating previous mentions.

    In the area of financial services, both Daiwa Securities (OTCF: DSEEY, $10) and Nomura Holdings (NYSE: NMR, $9.3) jumped by 7% and 9% respectively to hit new highs. Technically, both of their charts are bullish but that of Daiwa's is more orderly. Both companies are experiencing rapid growth and if the Bank of Japan honors its commitment to continue its easy monetary policies, then there's no reason to think that the growth in well-managed securities companies won't continue to expand. If you're looking to construct your own basket of Japanese stocks, I'd definitely take a look at these two, especially Daiwa. (Trade Note: Daiwa and a few others mentioned below have fairly low trading volumes so please use limit orders when placing a trade.)

    Three other companies in the Financial sector with compelling charts are MS & AD Insurance (OTCF: MSADY, $14.25) and commercial banks Mitsubishi Financial (NYSE: MTU, $7.2) and Sumitomo (NYSE: SMFG, $10). All three issues just broke out of multi-year bases and look poised to travel higher. In the Consumer Discretionary sector, auto maker Toyota (NYSE: TM, $125) continues to gain traction while badly beaten down electronics makers Sharp (OTCF: SHCAY, $5) and Sony (NYSE: SNE, $19) hurdle out of oversold bases on heavy volume. And no wonder! Despite the recent strong moves in both of these issues, their P/E's are still negative--a situation that will likely be changing and soon.

    Note that all of the above mentioned companies do pay a dividend, albeit small ones (but a lot better than CD rates!). As always, please do your own due diligence before acting on any investment advice, including mine.

    Sayonara until tomorrow.

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Comments (10)
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  • How long can we ride the Yen boom?
    14 May 2013, 12:17 PM Reply Like
  • Author’s reply » I'm thinkin' to at least the end of 2014.
    14 May 2013, 02:04 PM Reply Like
  • That Yen is too cheap.
    15 May 2013, 05:34 PM Reply Like
  • Author’s reply » I remember back in the Pleistocene when the Yen/$ was around 200:1.
    16 May 2013, 12:01 AM Reply Like
  • The policy is ill fated and will ultimately come back to haunt the Japanese economy. Rapicly devaluing the yen for the sake of ginning up the economy is window dressing. The long term fundamentals remain. This is no longer the Japan of the 1980's. Back then they had the competitive edge technologically speaking and also in terms of productivity which offset their lack of raw materials. Now they have a rapidly aging population, still no major shift resource wise and likely worse as more countries such as the PR Cruelty and India etc...are vying for these same resources as well as producing cheaper goods. The idea of buying viable products from China would have been thought absurd in the mid 80's....now China is boycotting Japanese cars, a possible war looms with China over the islands in the S-China sea, Ford has outsold Toyota in the US in hybrids and the Japanese auto mfrs are stumbling on trucks. Devalueing the yen too quickly runs the risk of stagflation and a debt spiral. A viable plan ? Worthy of investment ? I say MLP's operating in the unconventional oil fields are the best bet. It is a game changer as nothing short of oil independance for NA is at hand along with a shift of the balance of trade, lowered deficits, likley 7 % unemployment rate for US by dec-2013, more companies returning to mfr in NA to take advantage of the cheaper oil, gas and electricity.
    5 Jun 2013, 03:14 AM Reply Like
  • Author’s reply » Robert,

     

    I agree with most of your arguments. The concept of central bank QE is window-dressing and really the only folks making money on it are the big banks. Anyway, that's another axe to grind.

     

    My point in the article was to take advantage of this situation to make some quick money on it. The recommendations weren't meant as long-term investments, only as a way to ride out the BOJ's QE program (which could end at any time). I probably should have made that more clear.

     

    Thanks for chiming in and taking the time to articulate your thoughts. Much appreciated!

     

    Dr. K

     

    PS--Not that this matters, but Mark Cuban bet the farm on Japanese bonds when the QE program was announced.
    5 Jun 2013, 02:02 PM Reply Like
  • Mark Cuban could lose the farm he luckily acquired by getting out during the dot com boom. Being rich does not automatically mean he is the Oracle at Delphi, head of gold-feet of clay. Fundamentals at the end of the day are the bedrock of sound investing. I'm long Ford, NTI.nyse and EFR.tsx. Ford because volumes are increasing and they are well run--yield 2,6 %. NTI because they benefit from Bakken crude and Alberta discount oil and are also well run---yield 21 %. Long EFR because Uranium is going to pick up steam once the Russians stop selling their warheads and if Kazakhstan goes into meltdown like their neighbour Kzyrgistan did last year -- well Uranium prices will shoot up rapidly to put it mildly and then there is the likelihood of Japan restarting their dormant 48 reactors soon. Interest rates and currency is rearranging the deckchairs on the Titanic, fiddling while Rome burns.
    9 Jun 2013, 10:19 PM Reply Like
  • Author’s reply » I certainly wasn't implying that Cuban is a stock oracle but he's no dummy, either.

     

    I've liked Ford for a long time--think they're better positioned than GM.

     

    Thanks for your views on NTI & EFR. I'm unfamiliar with EFR--any US equivalents? In the nuclear space, here are three US-based ETFs that are on my watchlist: NUCL, NLR, URA. Any thoughts on any of these?

     

    One caution with nuclear is that some countries are either cutting back or scuttling their nuclear programs entirely. Germany wants to completely replace their nuclear power plants with renewable energies. Here in California, the San Onofre nuclear plant near San Diego is being shut-down and nobody's sure how much this will boost power rates. I certainly can't wait to find out...

     

    Dr. K
    10 Jun 2013, 02:07 PM Reply Like
  • EFR operates 100 % in the US and has the only uranium milling operation in the US. Listed on TSX and OTC for $$ reasons as many mining stocks are to raise money. At the moment I cannot comment opn your Uran tickers as I am out of town using a cellphone for another week. Latest news on Germany is that they are backtracking on denuclearization----scope it out to be clear though. Japan could restart it's 48 reactors and that in and of itself would be a shock to the system as that would be like throwing a switch and sudenly you have this big demand. The number of reactors is growing since Fukushima and demand is even greater. URanium is out of favour and dismissed and with cheap nat'l gas it's thought down for the count....not so fast though. Imagine EFR at 1,4 / share if things get hairy again---- serious payback for a limited stake. RE: California---they are hoping likely that natural gas will be their saviour but natural gas once it's been compressed and sent overseas will shoot up too. The Fukushima incident could have easily been avoided by simply placing the generators on the roofs of the buildings as well as having large water towers that would feed via gravity in case of emergency...very simple solutions. Fuskushima was intellectual laziness on the part of TEPCO, mostly avoidable. I have a 6 months to 2 year outlook on Uranium improving but once it does it will go quickly, within a couple of months. SA has put a 3 day delay on my comments for being a bad boy and telling it like I see it.
    12 Jun 2013, 02:45 PM Reply Like
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